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ForexBrokerInc Friday Market Update 22/05
EURUSD faced a test below 1.11 heading towards Wednesday’s publication of Minutes from Federal Open Market Committee Meeting but since the report was understood by traders as dovish, volumes picked up and Euro started to recover. Our expectation for the Euro-Dollar remains unchanged and as the move below 1.11 didn’t really attract sellers, we continue to see Euro-Dollar being traded at 1.15 – 1.16 rate in the coming weeks providing the market doesn’t break the key support at 1.10 – 1.1020.
The RSI,14 on H4 chart bounces off of the oversold area and daily RSI shows a bounce from the mid-point signaling a good support and plenty room for Euro-Dollar to move up.
Heads of a few central banks are due to speak today with ECB’s Mario Draghi scheduled for 9:30 EST.
For this reason we expect high liquidity during and after the speech.
GBPUSD
Pound-Dollar goes in-line with our expectations this week and remains in the raising channel.
The nine members of Bank of England’s Monetary Policy Committee voted to keep interest rate unchanged. Despite lower than expected inflation numbers in the UK, the retail sales data soared. This could’ve been expected as lower inflation is better for an average consumer, as this simply lets them buy more.
Today, Bank of England’s governor Carney is due to speak, at the same time as Mario Draghi from ECB at 9.30 EST.
Technically speaking, Pound-Dollar is expected to raise towards 1.60 with 1.50-55 remaining a solid support.
Oil
Oil too, in line with our expectations reached 58.50 and found a good support at this price level. Oil buyers who missed opportunity to buy at 58.50 could receive another chance at around 59.50 where the market is likely to move before another bull run is expected.
Traders should also be aware and ready for FED’s Yellen speech at 1 in the afternoon EST time.
With also Bank of Japan’s governor Kuroda speech scheduled for today (9:30 AM EST time), today looks to be a very busy day for traders. With high volatility expected, we recommend using Stop Orders on all open orders or minimize the exposure to avoid disappointment.
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The USD Dollar Index (DXY) rises for the third consecutive day on Tuesday and Dollar bulls will be looking at a close above 97 points to regain faith in Dollar --- and continue with the rally.
USDJPY
The dollar climbed to a fresh 8-year high versus Yen at 122.90 during today’s EU session.
Bank of Japan and Government are committed to maintaining the current monetary policies, which are asset market friendly and bearish on the currency. Recent rallies against the Dollar were not noticed on Dollar-Yen and thus break above 122 could’ve been expected.
In order to extend gains, traders will be looking to close this week above 122 where the intra-day support is located. The Daily RSI falls into overbought area and short retracements are expected.
EURUSD
Euro buyers cut their exposure and take heavy positions off the market below 1.11 and since then a fast paced bearish rally continued till 1.09 hit during today’s EU session.
Rate 1.09 falls on 61.8% fibo retracement on the wave from 1.055 and 1.1450 where a pull up is expected. Remaining Euro bulls should be protecting this level as a break below 1.09 may force the market to test 1.0750 and eventually 1.0550. For any move up to take place, daily close above 1.10 is a must. Then too, 1.09 should attract both bull and bear traders where more orders and volumes will decide where the market goes from there.
GBPUSD
Pound buyers may be left slightly disappointed after the break below 1.55 as today’s EU session saw GBPUSD traded below 1.54.
Pound is likely to be traded at 1.5350, a 61.8% retracement on the wave from 1.51 and 1.58. 1.5350 should provide more direction and despite the current Dollar rally and break from the upper channel, the Pound is still likely to continue towards 1.60 and current levels may be seen as a good opportunity to join. A break below 1.5350 may see a fast pace break towards 1.5250
There are multiple key events in the Economic Calendar for today and later this week. Traders are advised to be aware of them before making trading decisions. We also recommend using Stop Losses on each and every trade.
EURUSD
Heading towards Tuesday’s US session, Euro-Dollar climbed above 1.10 on better than expected Inflation data for the Eurozone.
With Greece apparently reaching an agreement among Troika, current price should attract more Euro buyers. It is important however that EURUSD ends today’s US session above 1.10.
First target for buyers will be price around 1.11 from where a short retracement can be expected.
Second target for buyers will be price around 1.12 level and break above should provide a confirmation that the market is ready to continue going up.
On the other hand, a close below 1.10 will attract strong selling interest.
Traders will be looking for clues during ECB’s Monetary Policy Statement and Press Conference scheduled for Wednesday at 8:30 am Eastern Time.
USDJPY
There’s little change in the direction on Dollar-Yen after the fast paced break and close above 122.
Having been in an 8 day consecutive move up, Dollar-Yen traders can expect a short correction as the 14 period RSI is well in the overbought area.
It seems that for the price to break and stay above 125 would need to test 122 first. Having said that, a break and close above 125 on the daily chart would indicate possible sharp movements towards 127.
GBPUSD
With last week being anti-Sterling, Pound-Dollar is currently testing a break above the declining price action channel. Pound-Dollar traders will be looking at a daily close -- as close below 1.5250 will attract sellers till 1.5150. The 14 period RSI on Four Hour charts shows divergence and thus it shouldn’t take much for Pound-Dollar to raise again. Daily close above 1.5250 will indicate a possible sharp movements towards 1.55 amid this week’s economic data.
VARIOUS
There are multiple events in this week’s economic calendar that will surely provide a lot of liquidity to the currency market and thus we advise our clients to get familiar with them before making trading decisions.
We also advise our clients to use Stop Loss orders each time you place a trade to minimize the risk and avoid any disappointments.
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Market Update 10/06
Current setups across major currency pairs signal a continuation of an anti-Dollar trade.
The Euro, Pound and Canadian Dollar show good trading opportunities.
Let’s start with Pound-Dollar
Since last week’s drop to 1.52 after the NFP release, and in line with our expectations and analysis from last Friday, the market attracted a significant number of buyers. Pound finally breaks away from the declining channel and new highs can be expected.
With UK’s GDP Estimate reading and Bank of England’s governor speech later today, it is important that Pound Dollar breaks and holds above 1.55. Such scenario in the next several hours of trade should attract more buyers and rally can continue with next targets around 1.5580 to eventually test May’s highs at 1.58.
On the other side a break below 1.54 on possible dovish outlook by the Bank of England could see Pound-Dollar declining to 1.52 where it all started last week.
Let’s take a quick at Euro-Dollar
Euro too, in line with our expectations found enough at 1.11 to attract buyers and current setup signals possible moves towards 1.16 rate in near future. Ideally, buyers will be hoping for a close above 1.1380 while supporting 1.1080 as break below should see a fast paced move towards 1.10.
Last but not least, the Loonie, Dollar-Canadian Dollar
The loonie remains heavily supported by higher oil prices and the decline towards 1.2250 was imminent and in line with our expectations during yesterday’s live webinar session. Short retracement can be expected from 1.2250 to about 1.2360-80 area before another bear run is expected. However, a daily close below 1.2250 this week, will most likely attract another bear run much sooner and till 1.20.
That’s all for today, don’t forget to check out the Economic calendar and use of stop loss orders.